Breach of contract claims 

The number of different breach of contract claims which employees can bring against employers is potentially endless, or at least as numerous as the many terms and conditions found in an average contract of employment.

Breach of a particular term

If you fail to comply with one or more of the terms in your staff’s contract this will be a breach of contract. It is possible for your staff to bring a breach of contract claim against you whilst his/her employment is ongoing or after it has ended.

If you have a contractual disciplinary or grievance procedure but do not follow it, this can also constitute a breach of contract.

Constructive dismissal

Not all of these types of breaches are considered serious enough to justify an employee resigning and claiming constructive dismissal however, here are some examples of the more important terms of a contract which if they are breached are considered serious are:

  • non-payment of wages
  • trying to relocate an employee without agreement or a mobility clause
  • putting an employee on garden leave without an express clause permitting this – this is said to be in breach of the implied term that exists in some types of employment contract that an employer will provide an employee with work
  • imposing a change on an employee’s terms and condition without an employee’s consent, for example to working hours

Wrongful dismissal (notice)

Not to be confused with unfair dismissal, an employee will be wrongfully dismissed if he or she has been dismissed without the correct period of notice or without a payment in lieu of the correct period of notice. The only time that an employee can be legitimately dismissed without notice or a payment in lieu of notice is when he or she is guilty of gross misconduct.

Where the contract is silent as to (doesn’t cover) the employee’s entitlement to notice, the court or tribunal will imply the appropriate length of notice. Usually this will be the same as the statutory minimum entitlement to notice, but in some cases, such as for the contracts of senior managers, may be longer.

If an employee is working under a fixed term contract, there may be no provision for allowing the contract to be terminated with notice. In such circumstances, when making a payment in lieu of notice, the employee is entitled to be paid an amount equivalent to his or her full salary until the end of the contract.

Pursuing a breach of contract claim

“Eligibility” and “forum” –  no length of service is required to be eligible to bring a claim for breach of contract. Generally employees can choose whether or not to issue proceedings in an employment tribunal or through the civil courts. Only employees whose employment has finished can sue through an employment tribunal however.

Time limits – in employment tribunals, employees must submit contractual claims within 3 months of the termination of their employment. This time limit can only be set aside if the employee can show that it was not reasonably practicable to submit the claim within three months. This test is very strictly applied.

Employees have six years to submit claims in the civil courts.

Remedies

Where a court or employment tribunal finds that an employer has breached an employee’s contract, it will award the employee damages. The amount of damages will be to compensate the employee for his or her financial loss as a result of the breach of contract. The tribunal or court will decide what the employee’s financial position would have been had the contract been performed properly by the employer and consider the difference between this and the employee’s actual financial position.

In the case of wrongful dismissal (failure to give the correct notice), the court or tribunal will award the employee an amount representing the wages and any other benefits which the employee would have earned during the correct notice period. The amount of damages that the employee will receive for other types of breach of contract will depend upon the nature of the breach.

There is currently a maximum limit of £72,300 on the amount of contractual damages which can be awarded by an employment tribunal!

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